The Multinational Monitor



Union Power in Brazil

by Stanley A. Gacek

SAO PAULO--When the Central Unica dos Trabalhadores (CUT) held its Fourth National Congress here from September 4-8, 1991, it could celebrate a decade of the new Brazilian unionism. The autenticos (authentic, new unionists) captured world attention in the late seventies by mobilizing the gigantic strikes in the auto industry of Greater Sao Paulo. Defying the intervention of the labor courts, workers went head-to-head with the transnational automakers, including Ford, Volkswagen and Saab- Scania, achieving impressive wage gains. In doing so, they challenged not only the official labor relations system, but the military regime and Brazil's corporatist order as well.

Over the last 10 years, Brazilian workers have organized job actions which are unprecedented in their magnitude and frequency, including the 1989 General Strike which achieved its objective of undoing the Sarney government's wage freeze program. Nearly 70 percent of the Brazilian workforce participated in that two-day mobilization.

Many of the autênticos joined with progressive intellectuals and clergy to found a new left-labor party called the Partido dos Trabalhadores (PT-Workers Party). Luiz Inacio Lula da Silva, the consummate "new unionist," was the PTs presidential candidate in 1989. He came close to winning, garnering 31 million votes to Fernanado Collor de Mello's 35 million.

Despite the impressive strides it has made in the last decade, the Brazilian labor movement continues to face stark economic difficulties. Nearly half of Brazil's officially registered workers earn no more than one minimum wage (Brazilian salaries are often calculated as multiples of the minimum wage), which is about US$ 50 per month. Although President Collor promised to eliminate hyperinflation in 1990 by means of a draconian wage, price and bank account freeze, his plan unravelled and prices quickly rebounded, devouring the purchasing power of Brazil's working population.

Moreover, the corporatist and authoritarian tradition in labor relations, dating back to the 1930s, has survived in Brazil's post-military regime. Although the country's 1988 New Republic Constitution supposedly strengthens freedom of association and the right to strike, many limitations on collective worker action are still intact.

The contribuição sindical, a euphemism for the trade union tax, lives on as one of the most glaring symbols of the old system. The tax is levied on all organizable Brazilian workers, whether or not they are actual union members. It amounts to one day's wages and is collected once a year. Employers automatically check off the contribution from their employees' paychecks and remit it to the Caixa Econdmica Federal, a state bank. The Caixa distributes the proceeds as follows: 60 percent to the sindicatos (local unions) which represent the workers of a single professional category (e.g. bankworkers, metalworkers) in a jurisdiction of not less than one city or township (município); 15 percent to the state federations and 5 percent to the national confederations, which also divide workers by professional category; and the remaining 20 percent to the Labor Ministry.

Although it is the primary source of revenue for over 50 percent of the Brazilian labor movement, the contribui��o also props up conservative and collaborationist labor leaders. By guaranteeing a steady stream of income to the official union structure, the contribuicao often works as a disincentive to organizing voluntary dues-paying members who can challenge the compromised, do-nothing leadership. Prior to the 1988 Constitution, the Brazilian government used the contribui��oas a means of keeping unions in line. Any "misuse" of funds, such as strikes or political campaigns, justified automatic intervention and trusteeship by the Labor Ministry.

To its credit, the 1988 Constitution removed certain governmental restraints on freedom of association. It eliminated the power of the Labor Ministry to automatically trustee unions for any infraction of Brazil's labor code. It also terminated the Labor Ministry's power to exclusively define professional category and grant recognition to new unions. As well as giving public employees the right to organize, the new constitution guarantees workers the right to strike, subject to enabling legislation defining "abusive" strike behavior.

Despite these advances, however, the 1988 constitution does not stop the government from prosecuting and disciplining unions through regular judicial channels. Even though the new constitution has prohibited the Labor Ministry from deciding questions of unicaidade--the rule that only one sindicato is entitled to represent all of the workers of a single professional category in a município--it has not stopped the civil courts from doing so. In effect, the judiciary is replacing the Labor Ministry as the arbiter of union recognition.

A 1989 enabling law extends the right to strike to workers employed in essential industries. But the law also says that workers who continue a strike after the labor court has resolved the collective bargaining dispute have committed an "abusive" act and are subject to prosecution. One of the most repressive features of Brazil's corporatist system is the right of the employer or the government to petition the courts for expedited arbitration of a dispute within hours after a strike has commenced.

The new labor centrals

In 1981, hundreds of Brazilian unionists convened the National Conference of the Working Class (CONCLAT) for the purpose of building a single, unified central. The effort at unity was soon frustrated, however, by deep ideological differences.

One faction consisted of the autênticos, many of whom were PT militants. They demanded a radical break from the corporatist order, including elimination of the contribuição. The other group consisted of labor leaders who called for unidade sindical, an ideology which endorses a close relationship between organized labor and the state. In fact, many who espoused unidade believed that state paternalism had done much to advance the interests of the working class.

The two factions failed to reconcile their differences, and the autênticos founded the CUT in 1983. Three years later, the unidade bloc created the Confederacao Geral dos Trabalhadores (CGT-General Confederation of Workers).

The CUT is the "largest and broadest based" of the Brazilian labor centrals and one which "continues to grow," says Charles Smith, the U.S. labor attache in Sao Paulo. As of September 1991, the CUT reported 1,679 affiliated sindicatos of all industries and professional categories, representing a total of 15,097,183 workers. As of March 1991, the CGT claimed 972 sindicatos representing 8,055,877 workers. (Brazil's economically active population is estimated to be 57 million. 34 million are registered workers who possess the official employment identity card. The remaining 23 million constitute the informal labor market.)

Since its creation, the CUT has demanded free collective bargaining without judicial restraints as well as the resolution of many labor disputes at the shop-floor level. It has called for Brazil to adopt International Labor Organization Convention (ILO) 87, which, by guaranteeing freedom of association, would dismantle much of the old system, including the trade union tax.

The CGT opposed ILO Convention 87 and the categorical elimination of the contribui��ountil its October 1990 national plenary. CUT International Relations Secretary Osvalso Bargas asserts that the CGT's about-face is due to "the simple fact that it desires approval from the ICFTU [International Confederation of Free Trade Unions]." The ICFTU is a worldwide amalgam of non-communist labor centrals headquartered in Brussels. (The other world centrals include the Christian- dominated World Confederation of Labor and the communist-aligned World Federation of Trade Unions.) The CGT applied for affiliation with the ICFTU two years ago. Several Western European members of the ICFTU's Executive had considered the CGT's position on Convention 87 and the trade union tax to be inconsistent with the principles of "free and democratic" unionism. (The AFL-CIO's American Institute for Free Labor Development (AIFLD) has financially backed the CGT since 1986.)

The other significant Brazilian labor central is the Forca Sindical (FS-Union Power), founded by Sao Paulo Metalworkers Union President Luiz Antonio de Medeiros in March 1991. (Medeiros was a member of the national CGT leadership from 1986-1989.) The FS claims to have over 400 sindicatos, primarily from the auto and steel sectors. It is no secret that the Collor administration is backing Medeiros. The Forca has already received approximately $4.3 million in government aid and loans.

The CUT congress

To those unfamiliar with the rough-and-tumble of Brazilian labor politics, the CUT's most recent national congress was nothing short of chaotic. It opened with the Sao Paulo Symphony Orchestra playing selections from Bizet's "Carmen" and ended in a ten-minute riot, complete with shoving, fisticuffs and several delegates being flung from the stage.

But such turbulence is symptomatic of the CUT's obsession with democratic process. The CUT's Fourth National Congress permitted a complete, no-holds-barred contest for internal hegemony.

Approximately 1,500 delegates attended the convention, representing a wide variety of leftist tendencies. Because the CUT professes to be the Single Central of Workers, it "accepts the affiliation of any legitimate union, regardless of political stripe," says Rio delegate Jairo Coutinho.

The CUT's largest faction is the Articulação, which has ties with the majoritarian and more moderate bloc of the PT. Many of the Articulação's leaders are veteran autênticos of the late seventies, sometimes called the "Lula generation." The Articulação believes that the CUT should continue to advocate radical economic unionism, which General Secretary Gilmar Carneiro dos Santos calls "sindicalismo de massa" or "sindicalismo de conquista." Carneiro says that pressuring employers to concede maximum wages and benefits and safe working conditions without the intervention of the judiciary "should take priority over any 'political-vanguard' unionism." He hastens to add, however, that "we reject simple economism" and that "a progressive union movement must embrace democratic socialism."

Minority leftists currents, including, among others, the CUT Pela Base (CUT For the Rank-and-File), the Trotskyist Convergencia Socialista and the formerly pro-Albanian PC do B (Communist Party of Brazil) all joined to form a minority coalition cleverly dubbed the "Bloaqao Antartica," or "Big Antarctic (Anti-Articulação) Bloc." The Blocao clamors for more rank-and-file control of the central and a more "revolutionary" trade unionism. Convergencia activist Ciro Garcia of the Rio Bankworkers accuses the majoritarian Articulação of being "social democratic," "bureaucratic" and "economistic."

One issue which divided the congress was the question of membership in the ICFTU. Leaders of the Articulação endorse affiliation. They believe that the WFTU has been eclipsed due to the collapse of communism throughout the world and that the ICFTU is the CUT's only serious option. "We can't afford to be isolated from the world trade union community," argues Articulação militant Marcelo Serreno.

Bloacao activists counter that affiliation with any world central undermines the CUT's meritorious policy of nonalignment. They contend that membership in the ICFTU means associating with the "bureaucratic" unionists of Western Europe and, even worse, with the "business unionists" of the United States.

The question will be fully debated and resolved at a special plenary session to be held in March 1992. Articulação leaders are confident that they will overcome the minority opposition next year.

The issue of negotiating with the Collor government also splits the CUT. The Blocao categorically opposes any social pact, contending that agreement would give legitimacy to an anti- worker government. The Articulação counters that negotiation does not mean collaboration; its supporters assert that the CUT should not and would not accept any accord that harms working class interests.

A third point of controversy, the issue of "qualified proportionality," undoubtedly contributed to the riot which closed the congress. The CUT's bylaws call for simple proportional representation. In other words, a slate obtaining 30 percent of the votes in a national congress is entitled to 30 percent of the seats on the National Executive. The Blocao argued that proportionality should be "qualified," so that prime executive departments (e.g . organizing and international relations) would be equitably divided among the majority and minority slates. After an initial tie vote and lengthy procedural wrangling, "qualified proportionality" was defeated on the second ballot.

The election of the CUT's National Executive was the tightest contest in the central's eight-year history. Of the 1,507 ballots cast, 786 went to the Articulação, producing 13 executive seats, and 721 went to the Blocao, yielding 12 seats.

The CUT's future prospects

The philosophical clashes which generated strife at the congress may become less important as the CUT confronts the day-to-day struggles of the coming year. With respect to collective bargaining strategy and strike tactics, there are really no profound differences between the unions of the Articulação and those of the Blocao. And given the hostile economic environment, as well as the Forca's raiding of the traditional CUT strongholds of auto and steel, both factions fully appreciate the necessity of avoiding a permanent split. Although "qualified proportionality" was defeated, the Articulação has already conceded several prized departments in the interest of unity.

However, the question of whether or not to negotiate with Collor must be resolved. Even though the Articulação contends that negotiation does not mean the automatic endorsement of a social pact, the CUT must decide whether progressive Brazilian labor should deal with a government which maintains authoritarian controls over union activity and promotes dual unionism (i.e. the Forca Sindical).

The Brazilian government's ongoing hostility to independent labor organizations was demonstrated in mid-September, when Brazil's petroleum workers struck Petrobras, the state oil company. The Supreme Labor Court (STF) intervened at the behest of the employer and granted a wage award which the workers found totally unacceptable. They resolved to stay out, but the STF quickly declared the strike abusive, allowing the company to legally fire all of the strikers. The Court also declared that each sindicato would be fined 100,000 cruzeiros per day. Seeing no way out, the workers returned to their jobs and accepted the wholly inferior settlement.

As a further demonstration of bad faith to Brazilian workers, Collor has crafted a labor law reform proposal cynically designed to strengthen the hand of business and weaken unions. The proposal eliminates the contribui��oin two years but maintains judicial intervention in collective bargaining disputes and strikes. Although unconstitutional, the Collor proposal restores the Labor Ministry's power to recognize unions by establishing "registration criteria." In short, Collor wants to remove the financial base for most of the official union structure without eliminating the other anti-worker features of the old system. The plan is facing staunch resistance in the Congress, however, and the Chamber of Deputies' Labor Committee has already drafted a counter-proposal.

In fact, Collor has been remarkably unsuccessful at implementing any sort of economic policy. The President's 1990 and 1991 plans to control prices and wages have completely fallen apart. Over the last year, labor and management have negotiated voluntary agreements which totally ignore the wage hike limitations set by the Economics Ministry.

Collor's economic failures have weakened him politically, and his approval ratings now stand at an all-time low. Some recent polls have indicated that if a presidential election were held tomorrow, Lula would easily prevail.

Collor's weakness combined with the CUT's massive funding has strengthened the central's position. His investment in Medeiros notwithstanding, Collor realizes that the success of any economic plan depends on the CUT. In September 1990, Collor invited the CUT to social pact negotiations without "limits or preconditions." Although the talks produced no agreement, the very act of inviting the CUT revealed Collor's desperation.

In spite of a congress full of rancor and infighting, the CUT has emerged as one of the most dynamic and democratic trade union centrals in the world today. It is also one of the most viable and credible institutions in Brazilian society. Without question it will continue as a powerful influence in Brazil's future.

Ford Motor Co. vs. the CUT

Striking at the heart of Brazil's "new union" movement, the Ford Motor Company has announced that it will close its São Bernardo truck and tractor engine plant in March 1992. The factory employs 1,200 workers and exports 80 percent of its production to Ford's truck plant in Kentucky. The São Bernardo plant produces 40,000 motors per year. The closing will affect as many as 25,000 workers employed by regional suppliers.

Ford contends that it must shut the factory because the engines will not satisfy 1994 U.S. Environmental Protection Agency standards. Robert Mason, Ford's coordinator of Brazilian operations, told São Bernardo Metalworkers union president Vicente (Vicentinho) da Silva that the motors will be produced in the United States. "Ford says that it will probably acquire the engines from the Cummings Motor Company in the United States," Da Silva reports.

The São Bernardo Metalworkers Union, whose former presidents include Lula and Jair Moneguelli (the current CUT president), recently sent a delegation to the United States to negotiate an alternative to the plant closing. In addition to Da Silva, the delegation included São Bernardo Ford worker Eugenio Queiroz, São Bernardo Deputy Mayor Djalma Bom and Plinio Sampaio, a former deputy from São Paulo and the current coordinator for state affairs in the PT's parallel government.

The delegation arrived in Detroit on November 14 and met with D. R. Killinger, Ford's director of international labor relations, and with Ernest Lofton, the United Auto Workers (UAW) vice president responsible for Ford. Both meetings were arranged by the UAW.

The delegation told Killinger that it did not understand why Ford had to shut down the operation in March 1992. "We told Ford that they should delay the plant closing for at least six months, in order that the Union, the Brazilian government and the company could explore alternatives," says Da Silva. "Even assuming that the engines do not comply with the EPA regulations for 1994, we know that the technology is available to bring the engines up to U.S. environmental standards," Da Silva asserts.

Although Killinger could not say that Ford would alter its decision, he promised to carry the delegation's message to Ford's president, Harold Poling.

Although the delegation received a cordial reception in Detroit, the São Bernardo Union is not certain that Ford is putting all of its cards on the table. "We worry that Ford may be using the EPA standards as an excuse to undermine the CUT's power base in São Bernardo," says São Bernardo Union Counsel Jose Siqueira. "In order to appease the American workers, Ford can say that it will relocate the production to Cummings USA," asserts Siqueira. "It makes far more sense for the company to shift operations to Cummings in Brazil, and, thereby, avoid the São Bernardo Ford contract," argues Siqueira. "That way, Ford could still take advantage of the cheap Brazilian labor."

- S.A.G.

Stanley A. Gacek is the assistant director of the International and Foreign Affairs Department at the United Food and Commercial Workers International Union in Washington, DC.

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